Dollar Against Euro in Late December
December 13, 2010
Is there a seasonal bias toward dollar weakness in the second half of December? No such case can be made about dollar/yen.
However, the dollar has declined against the dominant currency of mainland Europe between mid-December and yearend in 70% of the 37 years since a floating exchange rate system was adopted for the dollar. This pattern was most pronounced in the earliest years and during the first ten years after the advent of the euro. The dollar depreciated in late December against the German mark every year from 1974 to 1987 except for 1984 and against the euro in eight of the ten years from 1999 to 2008. The average decline of the dollar was 1.7% in the first of these periods and 1.3% in the more recent episode. Over all 37 years, the dollar posted a 0.9% mean depreciation between mid-December (i.e., the closest day to December 15) and end-month. That average rate of drop includes the first year of floating rates, when the dollar advanced 1.9% against the mark and 2009 when it gained 1.5% against the euro. In the table below, EUR signifies dollars per euro, and DEM stands for D-marks per dollar. A euro is worth 1.95583 marks.
| Year | Mid-Dec | End-Dec | USD Chg | |
| EUR | 2009 | 1.4534 | 1.4318 | +1.5% |
| EUR | 2008 | 1.3692 | 1.3973 | -2.0% |
| EUR | 2007 | 1.4427 | 1.4602 | -1.2% |
| EUR | 2006 | 1.3086 | 1.3189 | -0.8% |
| EUR | 2005 | 1.1968 | 1.1840 | +1.1% |
| EUR | 2004 | 1.3395 | 1.3575 | -1.3% |
| EUR | 2003 | 1.2295 | 1.2580 | -2.3% |
| EUR | 2002 | 1.0234 | 1.0494 | -2.4% |
| EUR | 2001 | 0.9030 | 0.8905 | +1.4% |
| EUR | 2000 | 0.8948 | 0.9419 | -5.0% |
| EUR | 1999 | 1.0066 | 1.0090 | -0.2% |
| DEM | 1998 | 1.6621 | 1.6690 | +0.4% |
| DEM | 1997 | 1.7729 | 1.7995 | +1.5% |
| DEM | 1996 | 1.5555 | 1.5405 | -1.0% |
| DEM | 1995 | 1.4435 | 1.4334 | -0.7% |
| DEM | 1994 | 1.5712 | 1.5485 | -1.4% |
| DEM | 1993 | 1.7175 | 1.7360 | +1.1% |
| DEM | 1992 | 1.5710 | 1.6166 | +2.8% |
| DEM | 1991 | 1.5905 | 1.5210 | -4.4% |
| DEM | 1990 | 1.4840 | 1.4965 | +0.8% |
| DEM | 1989 | 1.7355 | 1.6915 | -2.5% |
| DEM | 1988 | 1.7365 | 1.7730 | +2.1% |
| DEM | 1987 | 1.6270 | 1.5760 | -3.1% |
| DEM | 1986 | 2.0150 | 1.9370 | -3.9% |
| DEM | 1985 | 2.5165 | 2.4520 | -2.6% |
| DEM | 1984 | 3.0890 | 3.1560 | +2.2% |
| DEM | 1983 | 2.7580 | 2.7265 | -1.0% |
| DEM | 1982 | 2.4453 | 2.3830 | -2.5% |
| DEM | 1981 | 2.3000 | 2.2540 | -2.0% |
| DEM | 1980 | 1.9680 | 1.9620 | -0.3% |
| DEM | 1979 | 1.7406 | 1.7280 | -0.7% |
| 1.7406 | 1978 | 1.8950 | 1.8220 | -3.9% |
| DEM | 1977 | 2.1570 | 2.1110 | -2.1% |
| DEM | 1976 | 2.3958 | 2.3580 | -1.6% |
| DEM | 1975 | 2.6368 | 2.6230 | -0.5% |
| DEM | 1974 | 2.4605 | 2.4110 | -2.0% |
| DEM | 1973 | 2.6530 | 2.7025 | +1.9% |
Copyright 2010 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euro
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[…] For now, markets are in the yearend lull. While the forecasting industry delves into longer horizons, it actually is not a bad time to focus on a short time frame. One of the strongest seasonal patterns in the dollar happens in this period, a drop in the second half of December followed by a tendency to appreciate in the first half of January. The December part of this phenomenon is examined in an article I posted this past Monday. […]